San Antonio daily light. [volume] (San Antonio, Tex.) 1886-1907, 1887-09-17
AN UNFORTUNATE CASE.
a Death Blow to Building and Loan
Associations.

| a Death Blow to Building and Loan
Associations.
Those who have followed the history
Of building and loan associations In this
city, and elsewhere, are not unmindful
Of the great benefits resulting from their
operations. In this city alone, during
the eight years OF the operations Of
such associations, not less than 81 Co.,
600 has been expended In buildings, not
10 per cent. Of which would have been
thus expended had IL not been for the
fostering care and peculiar methods Of
these cooperative building and loan
societies. The laws governing loans
have not generally been held as govern
ing the advances made TO members OF
building and loan associations, as these
are strictly cooperative, all members
sharing In the accruing profits OF the In
stitutiOn. The conditions OF member
ship In such associations form q vital
part Of their working possibilities. Mem
bers are debsrred from withdrawal In
advance OF the maturity OF the shares
which they subscribe, OF, as penalty for
such Withdrawal, are allowed only .
proportionate profit OF that which they
would have realized, had they remained
as members until the maturity OF the
series. These profits are an actual Offset
to all excess OF interest. AS the books
OF every building and loan association
show.
The very possibility OF these associa-
tions conducting business depends upon
suoh charges for loans Ms will cover
both the actual cost Of money used, and
the payments as dividends during the
legal period for which shares remain.
To charge less than this would defeat
the whole purpose OF the association,
and open the doors to those who would
use the association rs convenience and
make merchandise Of Its credit without
returning them any value therefor.
The decision Of Judge NOOnan, rem
dered yesterday evening, In the case Of
Mrs. Amanda Robinson vs.. the Bexar
Building and Loan Association, Is to the
effect that such associations are merely
money lenders, and not cooperative
corporations whose members are bound
by the laws and regulations thereof
This decision consequently remsnds
these building associations to q strict
compliance with the usury laws OF the
state, and makes them liable In suits at
for the recovery OF excessive interest In
the case OF every member who repudi-
ates the obligation OF membs rship, and
takes advantage OF the association under
cover of such q ruling. The case before
Judge Noonan is strictly In point.
In March, 1883, the plaintiff con-
traoted with the defendant for the
erection of house to cost
$500, she owning the lot upon
which Ii was to be erected. The plain
tif owned "a shares OF stocks In the as
ISOLATION OF the face value OF 500 each,
to be paid for at the rate Of 81 per
month per share, and interest on the
81 500 at the rate OF $40 per month.
The shares to be cancelled and the
house released to her upon the maturity
Of the shares, which would have been
in some six or eight years. The house
was built and she took possession that
same year. Had she remained q men,
Der Of the association until the maturity
OF her stock series, she would have paid
S6l2 less than the actual cost OF the
building with interest at IL per cent per
annum until the maturing Of her stock,
by virtue OF her profits as a hareholder,
which Increase In a regular retio until
the shares are matured and cancelled.
Instead OF this, however, after enjoying
the benefits Of her home for about three
years she concluded to withdraw from
the association, paid up her shares and
took release. Twenty-one months
than legal interest on the money ex-
pended for her, and not considering that
without the aid OF the association she
could not have secured her home, she
brings this suit for usury and secures
the amount OF the total interest paid.
Though the system OF monthly pay
ments instituted by such an association
as this, men OF no capital are enabled to
fund their savings and secure homes for
themselves. The association acting as
q savings bank and conserving the means
Of day laborers and mechanics
until the result is comfortable homes.
Why should these Building and Loan
associations be required to return to
those to whom they have insured the
benefits OF home, all excess over actual
cost Of such insurance, and
receive nothing for their risk. Such Is
not the law as applied to insurance COM
panies, who insure life and buildings?
Why apply 1t to Building and Loan as
ISOLATION that insures the credit OF the
poor man until 1t brings him the bene-
dts Of q home?
The case goes up to the supreme
court, and II 1t Ia there affirmed, the
legislature must afford relief, or the
Building and Loan associations OF this
state must go out OF business, and the
poor men OF Texas lose the benefits OF
an agency, which has done more to pro-
vide cheap homes for the average oiti-
zen than any other agency known to
civilization.